The FINANCIAL — During the first two months of 2015 remittances inflow to Georgia amounted to USD 157,437,000, down from USD 203,089,300, or 30%, from the same period of the previous year. With 89%, Ukraine is a country from which the largest volume has been reduced. It is followed by Russia – with 80%, and Greece – 20%.
According to the World Bank, 12% of Georgia’s economy, 21% of Armenia’s, 31.5% of Kyrgyzstan’s, 25% of Moldova’s, 42% of Tajikistan’s, 5.5% of Ukraine’s, 4.5% of Lithuania’s, 2.5% of Azerbaijan’s, and 12% of Uzbekistan’s, rely on remittances.
These are some of the highest rates in the world. Of the five countries globally whose GDP is most reliant on these payments, three are former Soviet republics. In most of these cases money from immigrants in Russia comprises a significant portion of these inflows. About 40% of remittances to Armenia, Georgia, Moldova and Ukraine are from Russia, rising to 79% for Kyrgyzstan.
According to the World Bank, nine countries from Central Asia and the Caucasus, that rely heavily on cash sent home from Russia for their economic buoyancy, could collectively lose more than USD 10 billion in 2015 because of the weak Russian currency.
91.6 percent of the total money transfers from abroad came from 12 big donor countries, with the volume of transfers from these countries each exceeding USD 1 million in February 2015. In February 2014 the share of these 12 countries constituted 92.9 percent of the total volume of money transfers.
Private remittances from Russia and other countries to Armenia amounted to about USD 54.2 million in January 2015, a reduction of 34.8% compared to January 2014, according to the latest statistical data posted by the Central Bank of Armenia.
Money transfers from Russia to Armenia in January 2015 fell by 43.1%, if compared with January 2014, to approximately USD 37.2 million, while remittances from Armenia to Russia increased by 6.3% to USD 11.12 million.
Beside its dramatic reduction, Russia, with the largest number of Georgian immigrants, remains the leader by remittances to Georgia. During the first two months of 2015 USD 54,030,700 has been transferred from Russia; the sum was USD 97,261,300 during January-February 2014. Inflow from Greece amounted to USD 25,931,400 during the current year. The sum was USD 31,044,200. Georgians received 4.8% less transfers from Spain this year. The volume summed up to USD 3,847,100 in 2015, down from USD 4,034,700 from 2014. Georgian immigrants in Ukraine managed to send just USD 3,405,600 in 2015. The figure was USD 6,450,900 during the first two months of 2014. Transfers from Azerbaijan came to USD 2,660,100, which is 10% less than the figure of the previous year. A 3.8% drop of remittances has been shown from the UK. Money transfers from the UK to Georgia amounted to USD 2,212,100 during January-February 2015, down from USD 2,297,300 from the previous year.
Out of the 12 big donor countries, money transfers have increased from Italy, the USA, Turkey, Israel, Germany and Kazakhstan.
USD 17,505,300 has been transferred from Italy during the first two months of 2015, up from the USD 18,570,300 of 2014. USD 2.7 million more has been transferred from the USA, totalling USD 13,694,400. Transfers from Turkey amounted to USD 10,603,200 in 2015. The figure was USD 7,744,100 during the first two months of 2014. From Israel, transfers totalled USD 4,176,300 in 2015, up from USD 2,910,200 from 2014. Insignificant growth has been shown from Germany which amounted to USD 3,846,400; just over USD 600,000 more than in 2014. As for Kazakhstan, the sum was 2,208,900 in 2015, up from USD 2,040,800 from the previous year.
Due to decline of the Russian living standard, President Vladimir Putin recently stated that he will cut his salary, and that of his prime minister and other government employees, by 10 percent as the economy slides into the first recession in five years, eroding citizens’ living standards. Putin ordered the wage reductions from 1 May to the end of the year. Putin increased his and Prime Minister Dmitry Medvedev’s salaries by 165 percent in April last year. The President declared income of USD 60,000 in 2013.
Giorgi Beruashvili, 48, runs a business in Moscow. In his words, he has been transferring over USD 2,000 annually to his 85-year-old parents. Due to the solvency slump by Russians, now he is lucky to earn half that sum. Accordingly he has sent about 1,000 for now.
“The situation is almost equal among all migrants and also the local population. However, I am not thinking about returning to Georgia, as I see no better prospects in my home-country for now,” Beruashvili told The FINANCIAL.
The flow of migrants to Russia fell by 70 percent over the first week of January compared with the same period last year, said Konstantin Romodanovsky, head of Russia’s Federal Migration Service.
“It is possible this is connected with difficulties in finding low-skilled jobs,” explained Romodanovsky.
According to The Moscow Times, many migrant workers from Central Asia come to work in Russia in order to send remittances back home — remittances that have now lost much of their value due to the steep devaluation of the Rouble.
Russia’s Rouble fell about 40 percent against the U.S. Dollar in 2014, meaning that migrant workers’ wages are worth less than they used to be in their national currencies even as slowing economic growth cuts down on the number of low-skilled jobs on offer.
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